Hero Electric and its director Naveen Munjal had moved the HC challenging the Ministry of Corporate Affairs’ order for a SFIO probe against the company. The Delhi High Court on Wednesday asked the Serious Fraud Investigation Office (SFIO) to defer its investigations and not to take any coercive action till the Ministry of Heavy Industries submits its report on resolution of its dispute with Hero Electric Vehicles in an alleged of misappropriation of the Faster Adoption and Manufacturing of Electric Vehicles, or FAME II scheme subsidies by the company.
Hero Electric told Justice CD Singh that it was ready to resolve the dispute with the Ministry of Heavy Industries, which had asked the company to return sops worth Rs 133 crore with interest over alleged violation of FAME II norms.
Taking note of this, the judge asked Hero Electric to approach the concerned official from the Ministry with a proposal on or before December 12 and try to explore the possibility of resolving the issue. The court also said that the Ministry would thereafter proceed with the proposal and submit a report to it on the resolution on the next date of hearing on December 20.
Hero Electric and its director Naveen Munjal had moved the HC challenging the Ministry of Corporate Affairs’ order for a SFIO probe against the company. Earlier this month, the SFIO had found three companies engaged in manufacturing electric vehicles, including Hero Electric Vehicles, fraudulently availing subsidies to the tune of Rs 297 crore under the FAME II scheme.
However, the company through senior counsel Vikas Pahwa and counsel Anuradha Dutt contested the claims and sought release of Rs 570 crore as pending subsidy against sales already made.
Additional Solicitor General N. Venkataraman, appearing for the Ministry of Heavy Industries, said that Hero Electric's case should be dismissed at the threshold for forum shopping as a case on a similar issue was pending before the Punjab and Haryana High Court.
In the probe ordered by the corporate ministry in September, the SFIO found that Hero Electric had claimed subsidies by deceptively showing compliance with the applicable guidelines as several of those parts were either directly or indirectly imported from China, the ASG said.
Hero Electric told the HC that this is a “classic case where a pure civil dispute has been given a taint of criminality to gain an advantage in a pending civil dispute filed by it in the Punjab and Haryana HC.
The company had approached the Punjab & Haryana High Court against a blacklisting and deregistration order passed by the Ministry on allegations of non-compliance of FAME-II policy, which was launched in 2019 to promote manufacturing of electric and hybrid vehicles in India.
Hero also told the HC that SFIO had already raided and sealed its plant. “Clearly, the present proceedings are merely to recover subsidies legitimately given to the company by giving a cloak of criminality to a purely civil dispute on the pretext of 'public interest'. There is no public interest hampered as the subsidies granted to Hero has been passed on to the customers and this is not in dispute. As a matter of fact, there are subsidies which arc legitimately due and still withheld,” the petition filed through Dutt stated.
Pursuant to an enquiry directed by the Minister of Heavy Industries, its joint secretary had given a finding that the policy had “prolific ambiguities/inconsistencies wherein terms were not defined, unrealistic timelines were given, the policy was selectively applied and it is the Ministry who have to be blamed as the policy gave enough opportunity of contradictory interpretations,” she said.
